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What us meant by capacity?
The capacity of a business is a measure of how much output it can potentially achieve in a given period
What are the examples of capacity?
A fast-food outlet may be able to serve 1,000 customers per hour
A call centre may be able to handle 10,000 calls per day
A football stadium could seat no more than 45,000 fans at each match
A car production line may be able to complete 50,000 cars per year
What is capacity ultilisation?
The proportion (percentage) of a business’ capacity that is actually being used over a specific period
What is the capacity utilisation formula?
Actual level of output (units)/ Maximum possible output (units) x 100
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